It’s your OM in the News roundup! Follow the links to recent posts from our faculty contributors, including videos, and thoughtful questions for class discussion. In this edition, we discuss sustainable energy, project management, and lean initiatives.

Wind-Powered Plant Builds GM’s SUVs
Will GM become known as a green company? The plan is to use 100% wind power to manufacture SUVs in its Arlington, Texas, plant. Read more…

UPS’s Brown Friday
UPS plans to hire 40,000 seasonal workers in one day. What does it take to process tens of thousands of applications in a day? Read more…

The Skinny on Lean: It’s Everyone’s Job
To produce value for the customer, companies have to walk the talk from the top down on waste reduction, cross-functional teams, lean culture and more. Read more…

In lean, every effort toward producing more value to the customer counts. Although the appeal of lean is almost universal, its benefits are not necessarily so. Usually, the culprit is a lack of discipline in sustaining continuous improvements. As time passes, old improvements lose their effectiveness.

Elon Musk, the daring innovator and entrepreneur, aims for Tesla to surpass Toyota as the leader in lean manufacturing. He has laid out a vision for an automated, highly productive factory with outputs far exceeding those of competitors.

Multiple critics question his ambitions and highlight the numerous challenges Tesla has yet to overcome, including getting its Model 3 production line up to speed.

1. Elon Musk believes that Tesla can build a million vehicles per year in a single factory. Is he referring to design capacity or effective capacity? Explain.

Guidance: Actually, it is not clear whether Musk is referring to the maximum output rate (design capacity) or what can be built after allowances have been taken into account (effective capacity). This is a good opportunity to discuss the differences between the two definitions of capacity.

2. Critics warn Musk against the financial risks of building such capacity. Express their concerns in terms of efficiency and utilization.